11. Building a transportation network was a goal for the first oil baron
The former bookkeeper who had maximized profits through the expedient of striking better deals with shippers soon returned to the practice as Standard Oil grew. Already the most profitable of the many oil refiners in Ohio, all of which took advantage of transportation available on the rivers and Lake Erie, Rockefeller was determined to become the largest in the country. The railroads competed with each other for the lucrative oil traffic, and Rockefeller determined to find the means to control shipping rates. Rockefeller formed the South Improvement Company in 1871, which was a cartel of railroads and oil refiners which offered better shipping rates to its members, allowing them to charge less to customers. Three main railroads, the Pennsylvania, the Erie, and the New York Central were involved in the effort, which also served to reduce refining production among the smaller companies, who were excluded by the cartel from moving their products to market.